Does a Cashless Economy Make for a Surveillance State?

If you type “money” into a Google image search, you get pictures of metal coins and paper notes. People fixate upon this physical currency, but while we still use such transferable tokens for many small transactions, large ones are inevitably electronic. When Rolls-Royce acquires metal to produce jet engines, it doesn’t hand over a bundle of pound notes. It makes an electronic transfer from its bank account to the metal dealer’s account.

Increasingly, though, we use electronic transfer in small-scale transactions too. Rather than handing over physical tokens, you might tap a contactless payment terminal at the supermarket. This sends a message via an electronic communication system – the Visa or Mastercard system, for example – that instructs two banks to edit account databases that keep score of the buyer and seller’s money. The money “moves” owing to third-party payment intermediaries changing your records in their data-centre hard drives.

The technology that enables this is becoming ubiquitous, and with it comes the possibility to do away with coins and notes altogether. Electronic micro-transactions can replace 10p coins. London bus drivers have stopped accepting cash. They will accept your contactless card though. This is the emergent “cashless society”.

While the payments industry heralds this as a great leap forward out of the grimy world of physical cash and into the clean, electronic crispness of efficient, near-instantaneous electronic transactions, this glosses over the politics of a cashless society.